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Larry Gagosian, Andy Warhol And The Rise Of The Superdealer

This story originally appeared in the May 21 issue of Forbes Magazine.

How did Larry Gagosian become the most powerful—and almost certainly the richest—art dealer in the world? By discovering and, in some cases, rediscovering many of the most marketable artists on the planet, co-opting and promoting them, and doing everything possible to get the highest prices for their works. But good as he is—and he is very good, along with the nine others, on America’s Most Powerful Art Dealers —Gagosian, 67, might still be selling framed prints were it not for certain forces at work: the explosion of the global nouveau riche, the proliferation of international fairs like Art Basel and, most critically, the fetishlike cult of contemporary art, a phenomenon that has metastasized over the last 50 years.

Before Gagosian there was Leo Castelli (1907–99). A courtly émigré from Trieste, Castelli sold avant-garde works in his gallery, first on Manhattan’s East Side, then in SoHo, and turned his artists into rock stars. Among them: Jasper Johns, Roy Lichtenstein, Claes Oldenburg, Robert Rauschenberg, Richard Serra and Frank Stella.

“Leo Castelli brought fame to some of the most important artists of the last century,” says Milton Esterow, editor of Art News. Perhaps none as memorable as Andy Warhol, whose entourage included luminaries like Jim Morrison, Truman Capote and Lou Reed, and whose visual vocabulary consisted of popular icons like Marilyn Monroe, Muhammad Ali, Elizabeth Taylor, Coca-Cola, Campbell’s Soup and dollar bills.

Warhol’s first one-man show of pop art in 1962 introduced the world to his Campbell’s soup cans. It also unleashed decades of controversy about art and consumerism, and propelled Warhol’s profile to international heights, enhanced by an attempt on his life and his unusual personal life (he was gay but claimed he was a virgin). As his fame soared, so did Castelli’s and that of his other artists. The money followed: “200 One Dollar Bills” sold at Sotheby’s for $385,000 in 1986; it fetched $43.8 million, at the same auction house, 23 years later.

Contemporary art didn’t always command such eyebrow-singeing prices. By some accounts that started in 1973, when taxi tycoon Robert Scull and his socialite wife, Ethel, divorced and sold 50 pieces to Parke-Bernet (now Soth­e­by’s) for $2.2 million—a sum then unheard of. Jasper Johns’ “Target” (1961) brought $125,000 and Warhol’s “Large Flower” (1964) $135,000. So startling were the amounts that Rauschenberg confronted Scull after the sale, shouting, “I’ve been working my ass off for you to make a profit!”

Gagosian and Castelli knew each other, played cards together and, at one point, owned a gallery together. (Ga­go­sian also represents Edward Ruscha, Serra, Cy Twombly and Warhol, all once in Castelli’s stable.) Castelli introduced Gagosian to one of his wealthiest customers, billionaire S.I. Newhouse. While Castelli rarely played in the so-called secondary market (for work previously sold), Gagosian often did, putting his own and others’ money at risk. That ­tactic helped put him on the fast track to riches. Come 1988, Gagosian bid $17 million on behalf of Newhouse for Johns’ “False Start” (1959) at a Sotheby’s auction. “Everybody is stunned, and for me the price is unexplainable,” a dealer told The New York Times the next day.

Bidding up those prices were a new class of affluent Americans, Europeans and Asians, all chasing Western contemporary artists. More than 100 of the world’s 1,226 billionaires are collectors. Gagosian’s clients include Leon Black, Eli Broad and Steven A. Cohen. Today it’s a matter of celebrity clients competing to buy celebrity artists represented by celebrity dealers who are sometimes accused of poaching one another’s clients.

And there are more showcases than ever. Launched in 1973, Art Basel has become something of an annual Olympics where dealers flaunt their best work. A decade ago Art Basel opened a site in Miami, where 50,000 people last year viewed the inventory of 260 galleries; Art Basel recently bought a controlling interest in Hong Kong’s ART HK. But why wait for a fair? Gagosian owns 11 galleries worldwide and deployed them all in a comeback exhibition of British artist Damien Hirst earlier this year.

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